Executives and business units face shake up at Fairfax

Fairfax Media
is preparing to announce a substantial restructuring that is expected to result in fewer business units and senior executives.

It is believed the trans-Tasman media group could announce as soon as this week the changes aimed at further cutting the company’s cost base.

Fairfax, which publishes The Australian Financial Review, has been restructuring under its Fairfax of the Future plan since last June as it transitions from a predominantly print to a digitally focused business model.

The Financial Review previously revealed that management consultants Bain & Co had been engaged to expand the scope of the program by examining the structure of the business units.

Fairfax’s main business divisions are metropolitan media (which includes The Sydney Morning Herald, The Age and digital transactions), the Financial Review Group, regional publishing, New Zealand publishing and radio.

It is believed Bain has canvassed merging some of the publishing units.

It is understood the senior executive management changes will be aimed at maximising efficiency and profitability for the group’s new structure.

Most of the restructuring is anticipated to be completed by the second half of the 2013 calendar year.

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There has long been speculation about the future of Metro Media chief executive
Jack Matthews
and regional boss Allan Browne.

The metropolitan news media division, which includes The Sydney Morning Herald and The Age, continued to drag on group earnings in the first half of the 2012-13 financial year, with revenue down 7 per cent year-on-year and adjusted earnings before interest, tax, depreciation and amortisation falling 26 per cent.

Another focus of the Bain-assisted review is the marketplaces division, which includes digital business such as the online classifieds sites Domain (real estate), MyCareer (employment) and Drive (automotive), as well as dating site RSVP and holiday rentals site Stayz. In February, chief executive
Greg Hywood
said the company was reviewing MyCareer and Drive, both of which recorded declining online ­revenue in the first half.

It is believed options being canvassed for the marketplace online businesses include having them run independently or folding them into existing business units.

Another option believed to be under consideration is for Domain to acquire
Antony Catalano
’s shareholding in the Melbourne community newspaper business Metro Media Publishing (MMP), which is a joint venture with Fairfax. Mr Catalano is the founder and chief executive of MMP.

Mr Hywood said in February that the Fairfax of the Future cost-cutting program was tracking ahead of expectations. Annualised cost savings are expected to be $251 million by June 2015, an increase on the previous target of $235 million.